North Carolina bankruptcies are down - but why?
Image source: Flickr User doug kerr
According to the national news, bankruptcy filings are down across the country. This is good. In North Carolina, however, the statistics show something a little different. Year over year, bankruptcy filings are down nationally by as much as 15% which bodes well for the economy. But let's take a quick look at what's going on in North Carolina compared to in the rest of the country, why and what we have to look forward to.
North Carolina bankruptcy activity
In North Carolina, when you look at the last six months reported from February through July, and compare 2013 to 2014, there is an 8% drop in Chapter 13 filings and a 12% drop in Chapter 7 filings, but in 2014 in general, our state has been all over the place. For instance, in July of this year, Chapter 13 filings were significantly higher than they were both in 2013 and in the month before while Chapter 7s were down in both regards. In June, Chapter 7s did the same trick and were up both when compared to 2013 and compared to May.
So does this mean we're getting a better grip on our debts? Is the job market improving greatly? Is the economy fully recovered? We have to say that it's a combination of all three, but no one individual element drastically. The job market has improved across the country, but in many areas of NC remains sluggish and that's what likely has our numbers still higher than the rest of the nation. No, the economy isn't fully back on the rails, but it is very much improved. But it's the other factor we're most interested in – how we're managing debt.
A trend toward less debt
The recent recession burned most of us in one way or another – whether you lost a big chunk of your 401(k) when the market took a nosedive, saw the equity in your home evaporate or lost your job – you experienced it. Worse yet was those that had all of these things happen – and there were plenty of consumers in North Carolina that dealt with all of these things. When you live through a crippling financial crisis, if you're smart, it makes you gun shy.
More renters – In the wake of the mortgage crisis, more people have opted to rent long-term. This has lowered the risk of bankruptcies driven by the need to stop a foreclosure or deal with mortgage debt.
Less credit card debt – A Gallup poll shows that more people are saying no to credit cards and those that do use them tend to pay them off in full more often. This reduces another bankruptcy risk.
More conservative spending – Average consumer spending dropped last year and continues to drop because people are worried about getting in over their heads again.
If you can't get past your own recession money woes, bankruptcy is still an option depending on what debts you've still got lurking, how old these debts are, what type they are and how much you're earning. To find out more about how Chapter 7 can wipe out these debts or Chapter 13 can give you time to catch up on past due bills, contact the law offices of John T Orcutt today for a free consultation. We are North Carolina bankruptcy experts and are ready to help you get a financial fresh start today.